A reader recently posed a question about stocks with Rare Earth Elements exposure so I went on an adventure to track down a few ideas and back on September 15th GWG.V was one to watch.  It turns out that it really was one to watch go up up up 0ver 40% since then.  During some research on GWG.V I also came across Avalon Rare Metals (AVL.TO) which has had a tremendous run up already (150%) and although GWG.V has moved up it has lagged other REE companies.

Company Background:
Great Western Minerals Group Ltd. is a development-stage company with its interests in mineral properties. The Company holds 100% interest in the Hoidas Lake rare earth property. The Company also holds 25% interest in rare earth elements contained in a heavy mineral sands project in Utah. It holds 100% interest in 56 mineral claims located in Curry County, Oregon. The Company owns 100% interests in two mineral dispositions in the Douglas River area of Saskatchewan. Its wholly owned subsidiary, Great Western Technologies Inc. (GWTI), is a manufacturer and producer of specialty alloys, powders and related value-added products used in the aerospace, automobile, industrial, computer and high-tech industries. On June 27, 2008, the Company, through its wholly owned subsidiary, LCMG Limited acquired Less Common Metals Ltd.

1 Year Chart:

Why You Should Be Interested:
The Rare Earth Elements space will be a hugely profitable field in the coming years.  New hybrids cars use far more  rare elements then any other type of car out there and production of these cars is only going to increase.  All the high tech gadgets making their way to Chinese hands will also increase the demand of these elements so there’s a trend here that is hard to deny.  GWG is positioned with 100% ownership of several properties and also have value added products through their Less Common Metals acquisition.  Because of this they can grow the company in several different directions and provides a competitive edge that will be hard to beat if the Hoidas Lake property proves well.

From a technical perspective the stock is still trading comfortably above the 50 and 200 day moving averages with upward trends in both of them so the run up should not be finished yet.  Some other people view the stock as moving to above $1.00 and other as high as the mid $2 range.  I’m setting my sights to a more conservative estimate of $0.80 based on longer term prices and some type of placement to continue operations, although the LCM acquisition is helping with operating revenues.

This has been a quick analysis. As I find out more about the company I’ll be sure to share.

Technorati Tags: canadian penny stock pick, canadian stocks blog, penny stock investing, rare earth stock pick